Licensing

The trustee of a retail fund is a responsible entity and must be a public company that holds an AFSL with the appropriate authorisations.

Disclosure

Retail funds are required to issue a PDS unless an exemption applies. There is an exemption for small-scale offerings.

“Small-scale offerings” must:

not breach the 20 investors ceiling test;

not breach the $2 million ceiling test; and

be “personal offers”.

There will be a breach of the 20 investors ceiling test (item 1 above) if the offering “results in the number of people to whom securities of the body have been issued exceeding 20 in any 12 month period”.

There will be a breach of the $2 million ceiling test (item 2 above) if the offering “results in the amount raised by the body by issuing securities exceeding $2 million in any 12 month period”.

To meet the test under the Corporations Act “personal offers” (item 3 above) the offer must:

only be able to be accepted by the person to whom it is made; and

be made to a person who is likely to be interested in the offer.

Registration

Retail funds are required to be registered with ASIC unless they fall within the exemption of “small-scale offerings” where no PDS is required.

There are a number of documents required for registration, including:

A constitution;

A compliance plan;

A compliance committee (where less than half the directors of the trustee are external).

We can:

advise on fund establishment issues including Financial Services Regulation (FSR) implications of establishing a fund (e.g. licensing and the requirement to be registered as a managed investment scheme);

There are a number of issues for those needing finance and those providing finance: for example, fundraising disclosure requirements, Personal Property Securities Registration (PPSR) requirements, financial assistance prohibitions, interest withholding tax and state-based stamp duties.

We have experience in assisting those needing finance and those providing finance. We can help you deal with the legal aspects of the issues, and draft and negotiate the relevant legal documentation – loan or facility note issuance, security and/or disclosure documentation.

Starting and Operating a Fund
Starting up a fund can be a daunting undertaking. Things to be considered in the process include:
Trustee and Issuer – do you have the capacity to do this yourself or shoul... Continue Reading

Licensing
If you intend to operate a wholesale fund as the trustee, you will be required to hold an AFSL.
Disclosure
Wholesale funds are not required to issue a PDS. You will need to prepare and issue an i... Continue Reading

Fundraising disclosure requirements
On one hand, an exemption from the disclosure requirement is available for “small scale offerings”. The exemption in relation to disclosure does not necessarily mean... Continue Reading

A Managed Discretionary Account (MDA) is a facility by which:
An investor makes contributions of funds or assets (or provides access to their funds or assets) which form the portfolio assets.
The portfo... Continue Reading

Personal Property Securities Registration (PPSR) requirements
Apart from state-based land registration systems, there is an Australia-wide system for registration of security interests in personal property u... Continue Reading